Is it actually making a loss or is it just not making as much money as the company would it like to?
No one is really sure. Unite had their financial expert look at the accounts to verify what the Ineos management were claiming and he found the way they presented their accounts so convoluted that he couldn't separate out Grangemouth's figures.
It isn't just financial, though, there are more serious technical issues. As I understand it, the refinery at Grangemouth treats crude oil piped in from certain North Seas fields. The by-products include certain gases that the petro-chemical plant next door converts into sellable products. As the oil field has matured the nature of this gas has changed and Ineos say that it is no longer suitable. They need a new 'feed' source, and have proposed cheap shale gas from America. The only problem is that the plant would need to be converted to take this new feed, and Ineos had been trying to get up to £300 million from the state to help with the restructure.
In any case, I think the plant has only been working at about 60% of capacity and Ineos were talking about it closing in 2017. Into this situation came a little "local difficulty". You may remember a few months ago that there was a bit of trouble in the Falkirk Labour Party over the selection of a candidate to be a Westminster MP. There were allegations of the Unite union signing up union members to the Labour Party without there knowledge. Right at the centre of the issue was a Unite convenor at the Ineos plant, and I believe he was suspended from the party whilst the issue was investigated. The police became involved but they didn't find sufficient evidence of wrongdoing and the case was dropped.
The management at Ineos also became involved as it believed that the union convenor had been doing this on their premises, in their time, on their computers, etc, etc. They started disciplinary procedures against him and Unite and the workforce retaliated. Things escalated and in response to the threat of a 48 hour strike last weekend Ineos closed the plant. The union, taken aback, cancelled the strike and asked for the plant to remain open, to no avail. In fact the management had been playing hardball, trying to reduce costs, and by way of a 'rescue plan' they went ove the heads of the union and put severely reduced terms directly to the workforce. The response of the employees was negative and the management took the decision to close the petro-chemical plant down permanently. The oil refinery may remain open - they haven't taken that decision yet - but the finances of the refinery without the petro-chemical plant are severely diminished.
The response of both the Holyrood and Westminster governments is to look for another buyer. I'm not sure nationalisation is on the cards. Holyrood receives a certain amount of funding from the UK government, but not the sort of budget that would allow hundreds of millions to be spent on industrial intervention, and I'm sure the Westmister government wouldn't want to spend the money on a concern that may not have a healthy future.
This issue relates to another debate that was on here about vital infrastructure being owned by foreign investors. Although Ineos is registered in Switzerland, it is effectively a British private equity organisation. This British concern, though, is effectively holding both Scotland and the UK to ransom. In contrast, its partner in the oil refinery, Petro-China, as the name suggests a Chinese concern, today pleaded for all parties to sit down and reach a consensuus.